“Monetary policy will only work if structural reforms are made, but there is no negotiation” between the European Central Bank and the Governments. This was assured today by the number one of the Eurotower, Mario Draghi, during a hearing in the European Parliament.
The recovery of the Eurozone, Draghi added, “it is losing momentum: Actual growth stalled in the second quarter and survey results released over the summer were weaker than expected. The risks to Euroland's growth prospects are clearly to the downside and the European Central Bank expects that inflation of the currency area will remain at its current low levels in the coming months, before starting to recover during 2015 and 2016”.
as to first Tltro auction, launched last Thursday with a result much lower than expected (82,6 billion euros), Draghi said that the amount raised was "within the range expected on the basis of the intentions expressed by the banks". Draghi also stated that an assessment of the amount of funds allocated in these operations can only be made in December, after the second auction.
In any case, the European Central Bank remains ready to make use of other extraordinary monetary policy instruments, "varying their size" - concluded Draghi - if this were necessary to avert the risks of an excessively prolonged period of low inflation.
